Important Information about Potential New Interpretation of Federal Paid Sick Leave Law

Per new guidelines from the US Department of Labor, it appears that the DOL may be interpreting the new paid sick leave to apply only when the quarantine or isolation order is specific to the employee, not because a business is impacted by a shelter-in-place order. In other words, to trigger the new law, actual work must be available for the employee AND the employee must be unable to perform the work because of a quarantine/isolation order directed at the employee. Please note that the official regulations have not yet been published.

Examples Per New Interpretation

1. Local shelter-in-place order reduces business needs so much that receptionist is told to stay at home because there is not enough work for him. Employee is NOT entitled to federal paid sick leave.
2. Local shelter-in-place order exempts medical offices but receptionist has been told to stay at home by his doctor because he has been exposed to someone who tested positive for COVID-19. Employee IS entitled to federal paid sick leave.
3. Local shelter-in-place order exempts medical offices but receptionist has been told to stay at home by his doctor because he has scarlet fever. Employee is NOT entitled to federal paid sick leave.

What Does This Mean for Your Business?

The interpretation is uncertain and we are awaiting the official regulations to be published, but it is likely that:

1. Employers may have significantly less exposure for having to pay employees during state & local shelter-in-place orders;
2. Employers may need to manage their employees’ expectations as it is likely that employees will expect to be paid 80 hours if they are unable to work because of the local and state shelter-in-place orders; and
3. This will impact employers’ ability to claim tax credits.

Wendel Rosen will try to provide further clarification as more information becomes available from the Department of Labor, the CDC and possibly IRS in the next few days. In the meantime, everyone should be cautious about creating expectations concerning who will be entitled to the initial 80 hours of paid leave.

Questions?

Feel free to contact one of our employment attorneys: Tammy Brown (tbrown@wendel.com), Christine Noma (cnoma@wendel.com), or David Goldman (dgoldman@wendel.com).

Link to the DOL’s Guidance: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions